I have a guest post over at Wicker Park Realtor Dave Weiss’s blog, Serious Real Estate. It’s titled,

If Rates Are Low, Should Everyone Refinance their ARMs? Stop by and take a look.

Peter Thompson is illinois Mortgage Broker



Contact illinois Mortgage Company Today !

Welcome to this week’s Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected Illinois mortgage rates.

I’ve used the analogy of the mortgage bond market being like a roller coaster. Still fits. Or maybe it’s like an out of control elevator, rising upward, then without warning, plunging down in a free fall. Then when you are sure it is going to hit bottom, it shifts direction and heads back up again. Yes, it’s been another exciting week in the mortgage market.

This was another week without a clear direction. Markets, whether the stock market, mortgage rates or the market in pork bellies, typically trend in one direction, up, down or sideways. There will be day to day movement within the trend, so you can have down days in an upward trending market, but the trends usually hold until something happens which kicks them out in another direction. Mortgage interest rates have moved down a fair amount since the beginning of the year, but it’s still hard to see this as a decided downward trend. Mortgage bond traders are still bi-polar, and the swings between the highs and lows are enough to induce motion sickness. In this market volatility is King.

A lot of information came out this week. The Gross Domestic Product for the fourth quarter, a measure of strength in the economy, came in at 0.6% growth, a big drop from the 4.9% seen in the previous quarter. New home sales were anemic, consumer confidence was low, but slightly better than expected, and inflation was relatively tame. The two biggest events this week were the Fed meeting on Wednesday, and the Employment Report released this morning.

The Fed, as expected, cut the discount rate another half a point, making it a drop of 1.25% in just over a week – a jaw dropping cut. The economic data coming out is soft, but it is still mixed. Some commentators are speculating that the Fed knows more than it is letting on about the economy, and the reason for the dramatic rate cuts is the fear that something, maybe one of the big banks or the monoline bond insurers, is on the edge, and if it fell, the default would set off a domino effect of losses which would send us into a deep recession. Others think it’s just a matter of Fed Chairman Bernanke’s inexperience.

The jobs report this morning was the other big mover. The expectation was for 75,000 jobs being created last month. Instead we saw a loss of 17,000. It takes 150,000 new jobs each month just to keep even with the new people coming into the job market, so this was one weak report. It was moderated a little by upward revisions in the previous months reports, but the net difference still left a whole lot of people in the unemployment line. Mortgage bonds moved up and mortgage rates improved after the announcement, but, once again, sold off before the end of the day. It’s been that kind of week, and so far, that kind of year.

So how did all this news affect the markets? Once again we are pretty close to back where we started at the begining of the week. Still, if you are thinking of refinancing your mortgage, this is a great time to get started. I’ve been on the phone with my clients telling them to get their paperwork in so we are ready to go. With all the volatility, it pays to pick the right time to lock your rate in. You can do this easier if your paperwork is ready to go. If you don’t have a loan officer you work with, give me a call.

Here is what Illinois mortgage rates look like today for an A+, full doc purchase on a 30 day rate lock, with 0 points, and no origination fee.  The conventional loans are based on the highest conforming loan amounts, which give the best pricing. (Again, there are many factors which affect mortgage rates and your ability to be approved for a loan. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, give me a call or contact me and I’ll take the time to find the rate and program that is best for you.) :

Conventional loans up to $417,000

30 year fixed rate    5.625%    5.734% APR

15 year fixed rate    5.125%    5.237% APR

5-1 A.R.M.               5.00%      5.187% APR       

7-1 A.R.M.               5.125%     5.263% APR

For Jumbo loans over $417,000

30 year fixed rate    6.00%       6.179% APR

7-1 A.R.M.               5.75%       5.893% APR

FHA LOANS up to $270,200 with 1 point origination fee

30 year fixed rate    5.375%       5.623% APR

These are just a sampling of the mortgage rates available. We have special programs for first time home buyers and all the bond programs including the City of Chicago Bond program and the State of Illinois Bond program which offer no down payment and below market pricing.

There aren’t a lot of reports scheduled for release next week, but my guess is that we will still see some wild swings in pricing. Stay tuned and I’ll fill you in on the details as they come available.

Illinois Mortgage Rates and News.

Peter Thompson is illinois Mortgage Broker



Contact illinois Mortgage Company Today !